CORPORATE SOCIAL RESPONSIBILITY

By Dr.Priyanka Phonde

• Trends in CSR programme development• Strategies to promote CSR

Trends in CSR Programme Development

• CSR programme trends have developed over time changing with the changing conditions and directions in the business world– Branding– Core competency fit– Partnerships– Socially Anchored Strategy

Branding

• Branding & signature programmes are very popular

• Developing a brand name helps companies to position and advertise their values in public

• Ex. TOI : lends its name for mobilizing funds to help NGOs

Core Competency Fit -- I

• CSR initiatives that deliberately tie with their core competencies ( product , human resources and equipments)

• Companies may volunteer to lend these & contribute to community development– Ex. Ballarpur Paper Industries have a social forestry

programme.

Core Competency Fit -- II

• Providing material aid to NGOs for establishing a base for wider relationships– Eg. TCS, Thermax providing their old computers

to municipal schools for fostering computer literacy.

• Why should Corporates enter into Cross Sector partnerships ?

Why Partnerships

• Voluntary Sector – Skills in the areas of mobilizing & motivating

volunteers, networking , advocacy and campaigning

• Business contact with NGOs – Learning community development skills– Development & Implementation of CSR programmes

by involving other stakeholders – Extremely beneficial for those who are involved in it• Eg. Excel Industries & MMC : Waste management

• What is partnerships based on?

Basis of Partnerships

• Mutual recognition of skills and resources that each sector can contribute

• A win-win situation to all those who are involved

• How can stakeholders contribute in a cross sector partnership?

Partnerships For Corporates

• Able to contribute to the – Financial profits – Provide a positive environment for growth– Increase the corporate value from the shareholders

point of view – Contribute to the societal value

Partnerships For Government & Civil Society Organizations

• In improving its governance by providing specific interventions in managerial and technical areas

• To civil society organization it should strengthen its functioning and ability to create an impact

Forms of Partnerships• Cash donations from corporates to struggling community

organization helps to attract further support

– The Infosys Foundation• Grants to socially & physically challenged children for education.• partnered with various NGOs & local government in strengthening

rural development activities and infrastructure

– Cadbury India : funds a street children project focusing on education

– Ranbaxy has contributed for community health care programmes

Partnerships• Equal players

– Pratham : A triangular partnership between the government, corporate sector and citizen to achieve universalization of primary education.

– Catalytic role in improving primary education in Mumbai– Developing low-cost mass replicable innovative models to address

existing problems in the area of education– Motivating teachers & parents – Studying the current system to make it more effective.

• Some Business partners of Pratham – ICICI,IDBI, British airways, BEST and Mahindra’s

• Issue/cause specific partnerships– Ex. Mahindra & Mahindra : encouraging education

at all levels: has partnered with various NGOs in both rural & urban areas to further the cause of education

Partnerships

• Cause related partnership– Companies adopting this view feel that a social

attribute added to the products influences consumers brand behaviour which results in increased sales

Cause related partnership• P&G , Hygiene & Health Care India : project DRISHTI – 1st

ever Sight Restoration Corporate project in association with NAB

• OPEN MIND with UNICEF : support & educate working children

• These initiatives are support by their brand. Part of the sale of the products is contributed towards these initiatives

Activating active citizenship and exchange of skills

• HLL deputes management trainees to NGOs to sensitize them to the rural ethos, markets & culture

• OTIS elevators motivates its employees to work with mentally challenged .

• Tata Group of Companies encourages its employees to participate in community development activities

SOCIALLY ANCHORED COMPETENCIES MODEL

• Integrates Corporate Social Responsibility and Competitive Strategy

• Discusses how companies may use core competencies to drive CSR initiatives and achieve significant competitive advantage

• By integrating SACs in their CSR operations, companies are able to develop new and improved products and services for the society, more efficient production processes and strong reputation and brand identity.

CSR MISALIGNMENT

INEXPERIENCED / INAPPROPRIATE

CSR STAFF

CSR MGMT STRUCTURE ISOLATED

FROM BUSINESS

LIMITED OR RESTRICTED CSR BUDGET

MISALIGNMENT BETWEEN BUSINESS AND SOCIAL RESPONSIBILITY STRATEGIES AND FUNCTIONS

IMPACT DILUTED DUE TO LIMITED BUDGET

ALLOCATION TO MANY CHARITIES

CORE COMPETENCIES AND BUSINESS ASSETS

NOT FULLY USED

DECISIONS THAT DAMAGE

REPUTATION

MINIMAL OR NEGATIVE SOCIAL AND BUSINESS IMPACT OF CSR PROGRAMS

CAUSES

PROBLEM

CONSEQUENCES

COMPARING SACPROGRAM COMPONENTS

TRADITIONAL CSR PROGRAM MODEL

SAC INFLUENCED CSR PROGRAM MODEL

GOALS Focuses on social impact that is often not measured

Designed to deliver social and business impact that is measured and attributed to the project

STRATEGIES Vary from project to project. Tend not to take advantage of company’s skills.

Built on core competencies. Includes skills from the company as well as its partners.

BENEFICIARIES Are broadly defined. Usually, constituents of the partner organisation.

Targeted towards stakeholders strategically linked to the company and its businesses.

RESOURCE MIX Mix of cash grants and product donations. Sometimes, emplyee volunteerism.

Creative mix of cash, product, people and other assets that leverage the maximum impact.

MANAGEMENT CSR staff approves projects. Maintains a reporting relationship with partners.

Cross functional management teams that participate in design, overseeing and evaluation.

SAC MODELBUSINESS BENEFITS• Lower costs / waste• Increase Efficiency• Reduce risk• Add Value• New Products• License to operate• Reputation

SOCIAL BENEFIT• Vibrant Communities• Strong community relations• Employee well-being and productivity

INTEGRATION AND LEARNING• Team Formation• Goal settings• Experimentation• Dissemination

SOCIALLY ANCHORED COMPETENCIES• Competencies appropriate for CSR initiatives• Building blocks for new mind set to deliver value

STRATEGIC ALLIANCES• NGO• Interest Groups• Government• Other Companies

IDENTIFICATION OFCORE COMPETENCIES• Skills• Experiences• Abilities• Other Assets• Collective Learning

IDENTIFICATION AND ANALYSISOF KEY STAKEHOLDERS• Customers• Investors• Employees• Suppliers• Government• NGOs

Strategies for promoting CSR• Promotion of ‘CSR-friendly’ social dialogue• Rethinking the governance• Enabling the actors to play their role• Promoting the internal as well as external

aspects of CSR• Intensifying the dialogue• Fostering CSR among SMEs• Promoting CSR as a tool to anticipate change

‘CSR-friendly’ social dialogue

• Foundation research suggests that CSR can only exist in conjunction with a strong social dialogue

• It is not easy for the traditional players in social dialogue to practice CSR

• Incorporation of CSR into the agenda of in-house social dialogue is still minimal

• Many information/consulting procedures ignore it or deal with it at minimal level

Barriers to CSR friendly social

• Decentralized production networks,• Recurrent restructuring ,mergers & acquisitions makes

it difficult for company boundaries to coincide with the boundaries of social dialogue

How can information on CSR be promoted so that the existing social dialogue can expand to include these new dimensions?

Options in Social Dialogue

– Dialogue with other stakeholders can be developed in parallel to the social dialogue and bridges built between them with the help of the binary model of social dialogue

– Employees can act as representatives to build the bridge between stakeholder.

– Challenge lies in expanding social dialogue without weakening the traditional social dialogue

Rethinking the Governance• Governance is designing and implementing rules,

processes and practices• In relation to CSR governance is at two levels: – Company and – Society

• At the Company level it means taking on board a diversity of stakeholders and multitude of expectations

• Taking these considerations &organizing necessary processes and making tradeoffs between the different expectations

Rethinking the Governance• However the management receives primary mandate

from stockholders• Question is whether the executives receive a real

‘social mandate’ which allows them to commit to other stakeholders

• Applying CSR may also affect the way governance is exercised in society

Enabling the actors to play their role

• Skills & tools are important to allow stakeholders to play their role properly

• Today the acquisition of these skills by stakeholders and the development of these tools is not sufficient to allow them to act efficiently

• Ex.: Civil Society has difficulties in playing its role because – The actors & their expectations are not clearly identified– The members do not have the necessary skills and

resources to act properly

Enabling the actors to play their role

• Initiatives already existing which can help actors both inside & outside the company should be reinforced

• Ex: Helping stakeholders to be more structured & professional thereby increasing efficiency– Creating appropriate institutional frameworks

which permit stakeholders to meet & discuss CSR

Promoting the internal as well as external aspects of CSR

• External aspect of CSR is important and tends to get a lot of attention

• Internal aspect also important

• In an economy of decentralized production and networking it is important to look at issues of– Job quality, – health & safety provisions, – Working conditions of employees of subcontracting companies

play a major role in CSR policies

Intensifying Dialogue

• Active dialogue among stakeholders : crucial for success of CSR

• Research: Companies have interest of enlarging the focus to other stakeholder & not just consumers

• New way of business: Based on management and dialogue with stakeholders

• Trust , transparency, internal & external audit can create and foster successful dialogue & sustainable corporate governance

• Local municipalities and governments have an important role to play in facilitating partnerships

Fostering CSR among SMEs

• Smaller companies have little knowledge of what is CSR• They do not possess the human & financial resources

when it comes to developing tools for reporting CSR• Moreover companies employing subcontractors can

have a strong influence on their suppliers by compelling them to standardize & label their practices in the areas of quality, safety and the environment.

Promoting CSR as a tool to anticipate change

• Pro-active, prevention approach to restructuring can be beneficial to all stakeholders

• Practices positioned in advance of restructuring can prepare employees to anticipate & prepare for the coming change

• Relevant prior information & consultation with parties involved are prerequisites for socially successful restructuring

• It raises the question of how far socially responsible companies should commit themselves to that approach and which priorities could be used in this approach